National | Opinion

‘State Enchantment’ hijacks 5G in Ghana

Last week, Ghana’s Minister of Communications (and “digitalisation”) held a press conference in the heat of controversy about the government’s decision to award the country’s only 5G telecom license to a shadowy entity called, Next Gen Infraco Ltd. 

In a letter to the lead regulator of the telecom sector, the National Communications Authority (NCA), on the 11th of March, 2024, the Minister ordered the NCA Boss to “proceed to conclude on licensing the frequencies to Next Gen Infraco”, based on an “executive approval” by the President of Ghana on 22nd August 2023. To underline the diktat, she reminded the NCA Boss of her previous instruction not to undertake an auction or a tender.

The One-Week Company

The initial spark of the controversy was the exposure by award-winning investigative journalist, Manasseh Awuni Azure of the 4th Estate media program, of the fact that Next Gen Infraco had been incorporated only on 16th August 2023, barely a week before the President’s so-called “executive approval”.

The award of telecom licenses in Ghana is subject to the terms described in section 58(8) of Act 755, the main body of laws governing the telecom sector. Auctions and tenders are the primary model. However, the regulator may engage in direct negotiations to set a fixed price and/or outline specific criteria for the award to a licensee. 

A Sweetheart Deal

Using this discretion under the law and on the back of the Ministerial orders, the NCA, in a letter dated 13th May 2024, granted Next Gen Infraco a ten-year exclusive mandate during which period it will be the only company allowed to operate a 5G network in Ghana(with latitude to also run any 4G services it wants). Three high-value bands were handed over to the company to allow it to set up its network.

Earlier on (29th April 2024), the NCA, in a mad rush to obey the Minister, had sent Next Gen Infraco a comfort letter with all the key terms of the arrangement, some of which clearly needed the anchoring of a detailed contract and a national regulatory framework since the decision substantially alters the playing field for the entire industry as far as 4G and 5G services are concerned.

The 29th April letter, issued 6 days after the company formally applied on 23rd April, acknowledged receipt of the $50,000 application fee. It restates the intent of the government to make Next Gen Infraco the monopoly wholesale provider of all 4G and 5G connectivity in the country (exclusively for 10 years and over a total licensing period of 15 years). Essentially, every telecom company wishing to deliver superior voice and data (internet) services to Ghanaians will have to buy in bulk from Next Gen Infraco and retail onwards, regardless of whether it has already spent money on contractors to upgrade its own network to deliver 4G and 5G services or not. 

For these massive benefits, Next Gen Infraco only needs to remit $6.25 million to the government. Payment for the remainder of the remaining license fee is nicely spread over a 9.5 year period to enable Next Gen Infraco to essentially “work and pay”.

Where is the NCA Board?

Given that the NCA only had 4 working days between 23rd April and 29th April 2024 to agree to all these terms (not even accounting for the clearing time of the cheque used to pay for the license application fee), it is ridiculous to assume that this was a decision carefully deliberated over by the board of the NCA, a group evidently serving at the sheer pleasure of the Minister of Communications. Because as anyone who has ever served on a board with strict fiduciary responsibilities knows, a serious deliberation process involving a major policy change (imposing a monopoly wholesale provider on an industry) can't happen over four days, including drafting of the necessary board and management papers.

Consider also that, in the past, telecom companies have had to find large amounts of money to pay license fees upfront since revenue for the Exchequer has always been a consideration for the leasing of spectrum to private companies. In this case, Next Gen Infraco will continue to pay the license fees only if, over the 10 years, it continues to make money. No penalties are specified for abandoning the license midstream and the only requirement to convert the provisional license issued within 4 working days of paying the license fee (of $50,000) is to pay what is essentially a commitment fee of $6.25 million. 

In short, a lot of care has been taken by powers that be to ensure that Next Gen Infraco bears no commercial risk at all in this endeavour. This raises the question, who or what is “Next Gen Infraco”?

How State Enchantment Works

If you listen carefully to the Minister speak, you would appreciate why the term, “state enchantment” is in the title of this brief essay. According to the Minister, Next Gen Infraco is the country’s salvation. Hear her:

The government of Ghana in collaboration with Ascend Ghana [Digital], K-NET, Radisys, Nokia, Tech Mahindra, supported by all mobile network operators in Ghana, starting with AT and Telecel, has launched the NextGen InfraCo.

The impression being created is that “everyone, apart from that recalcitrant bully, MTN, is on board”. The idea that MTN is an incurable monopolist deploying market-crushing tools to dominate the Ghanaian telecom market is pretty much dogma in many elite circles in Ghana. Thus, painting Next Gen Infraco as an alliance of all the kids on the playground against the school bully is bound to resonate massively. So also is latching on to the “open access infrastructure” concept, which has gained so much attention around the world and respect in certain policy circles.

A classical operator-neutral open-access infrastructure network design with stakeholder linkages. Source: Amit Bhatia (2011)
Nokia’s design concept for enabling open-access networks to be carrier-neutral. Source: Nokia

By framing its actions as consumer-focused, sovereignty-promoting, monopoly-busting, policy-smart, and innovation-enhancing, the Ministry of Communications is shielding the true motives behind its quest to ram through Next Gen Infraco behind a grand mask of feel-good buzzwords. 

In the past, we have referred to this phenomenon as “state enchantment“. When done very well, it mutes scrutiny and criticism by making those who ask tough questions look churlish, cantankerous, and blind to great vision. Pure cash grabs are elaborately decorated as transformative state projects. That, dear reader, is “state enchantment”.

A Clique in Charge

The simple truth, however, is that Next Gen Infraco is controlled by a small coterie of investors who today control all the lucrative gigs in Ghana’s telecom center. How do we know?

It started with the equally egregious push to impose Kelni GVG on the telecom sector as a “revenue assurance provider” (i.e. to stop the telecom companies from cheating the government on taxes). A group of activists tried to stop this but eventually abandoned the use of litigation due to spiraling costs. Not, however, before they made some shocking discoveries.

The entire Kelni GVG tender was effectively rigged. None of the companies carefully selected to bid through the restrictive tendering process were proper companies. Today, none of them exist in any serious form. Virtually all of them were also represented in the process by the same law firm, which sent representatives to the bid opening: Integrated Legal Consultants. A company that appears to specialise in providing high-powered nominee services to a range of investors and other economic actors.

Seeing Integrated Legal Consultants and their personnel on the list of the primary shareholding Directors of Next Gen Infraco immediately set alarm bells ringing. Unless, once again, they are being presented as representing the various stakeholders the Minister claims are part of this shadowy “consortium”, the question begs to ask: where are the representatives of the long list of companies she mentioned on the incorporation documents of Next Gen Infraco? Where is Tech Mahindra? Nokia? Radisys (the Mukesh Ambani-controlled entity that promoters of Next Gen Infraco have been using for massive PR these past few days)?

The great, magnificent, and ascendant Ascend Digital!

We know where, “Ascend Digital” is, though. Right in the middle of things. In fact, Ascend Digital has been presented as the Leader of the Consortium. The bare truth, furthermore, is that Integrated Legal Consultants only really represents Ascend Digital, an entity entirely beholden to the same crew behind the Kelni GVG gig.

The only three executives of Next Gen Infraco disclosed to the NCA in the license application process (which requires full disclosure of Directors and management personnel) are:

  • Tewu Awoonor: a former Executive of Tigo, now part of the government-owned Airtel-Tigo (AT) entity, who is reported to have left Tigo (before its merger with Airtel and eventual takeover by the government) under a bit of a cloud.
  • Chanana Harkerat (as per his national identification information): an executive better known as Harkirit Singh, the CEO of Ascend Digital and Executive Director of Next Gen Infraco (though he mysteriously opted not to appear in the incorporation documents).
  • Georgia Augusta Webb: a lawyer at the famed corporate secretarial and nominee services provider, Minkah Premo & Company, who has no actual executive responsibilities at Next Gen Infraco.

We will get back to Tenu later. Ascend Digital is the real gee in these affairs. 

For the last couple of years, Ascend Digital and its controlling minds have webbed their way into the telecom industry with extraordinary heft. They have won several contracts to connect post offices in Ghana using World Bank money.

It didn’t end there. More World Bank e-Transform money (nearly $50 million) went into a raft of other connectivity projects for clinics, district assembly offices, and other rural locations. Frequent readers of this website are aware of our ongoing efforts to probe World Bank financed projects in Ghana. Suffice it to say that the Ascend Digital – Airtel/AT projects are among those that have raised more than a few eyebrows. 

COVID-19 App

Ascend Digital was also behind the COVID-19 app branded as “fraudulent” by prominent social commentators. Though the Head of the main IT Agency in Ghana claimed that the said app had been developed for free by Ascend Digital and its partners, it later came to light that as much as a million dollars of public money went into it, even though it was never deployed by the Ghana Health Service. To date, no public investigative agency has had the gumption to investigate.

Smart Workplace Program

Of the many murky projects overseen by the Communications Ministry in recent years, none is murkier than the so-called “Smart Workplace” platform that was called out by the usually pliant Public Procurement Authority as representing an abuse of the “single/sole sourcing” method of procurement.

Other investigators have noted how $8 million authorised by the cabinet for use in building Smart Workplace as a remote working solution for public sector workers during the COVID-19 pandemic eventually ballooned to over $31 million. The company at the forefront of this magical spectacle, Smart Infraco, is an Ascend Digital entity.

The Shadowy Group Monopolising Ghana’s Telecom Sector

Ascend Digital, Smart Infraco, iQuent, Next Gen Infraco, etc. etc. All these are offshoots of the same tentacly shrub, extending its crawling tendrils across the entire telecom sector. 

Regarding the 5G play, there is no grand consortium in the true sense of the word. Some companies are indeed lining up in the hope of contracts that the lucky gig holder will issue once all is set. Some will indeed invest in the SPV controlled by the gig holder if the risks continue to be carried by government. But it is completely deceptive to make it look as if Next Gen Infraco is indeed an “open consortium” set up by the industry to level the playing field and advance the anti-trust campaign against MTN. That is how its promoters want it to be seen in order to garner support. Its real motive is to hog the 5G resources of Ghana and flip and flog it for quick cash.

So, what exactly is the problem?

Besides the fact that creating shadowy wholesale monopolies to enrich cronies? Well, as of now, there is no detailed regulatory framework of how this new monopoly wholesale 4G and 5G infrastructure model will work. Such uncertainty is seriously bad for investment.

Secondly, without tight regulations, the wholesale monopoly could abuse its position and price discriminately to serve other agendas. Ascend Digital currently controls AT (the state-owned telecom company), and has been trying to privatise it through the backdoor

The endgame here is to create an Ascend-AT-Next Gen Infraco complex to become the dominant telecom operator in Ghana. Such a strategy merely aims to replace the much lamented MTN monopoly with a new one, but this time backed and sustained with government fiat. 

Why haven’t we seen a more spirited campaign by Ghana’s Opposition?

Because Tenu Awoonor, the nominal CEO of Next Gen Infraco, has strong ties to the opposition. He was put on the Ghana Infrastructure Fund Advisory Committee when the current opposition was in government, and is a relative of the deceased former Chair of the Council of State during the same period.

GIF Advisory Committee Members with the former President

Whilst the current political economy calculus has been arranged cleverly to sustain this state enchantment project, there are a number of developments likely to derail it. In subsequent commentary, we will lay out a few.

[This is a quick draft of a developing story. Expect updates.]

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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.